Dow rose 60 (but 150 below session highs), advancers slightly ahead of decliners & NAZ added 26. The MLP index gained 1+ to the 252s & the REIT index was up 2 to almost 371 (nearing record highs made in 2016. Junk bond funds continued mixed & Treasuries were modestly lower in price. Oil fell almost 2 to the 55s & gold gave back 2 to 1330 (more on both below).
AMJ (Alerian MLP Index tracking fund)
![Live 24 hours gold chart [Kitco Inc.]](https://www.kitco.com/images/live/gold.gif?0.2180338269244485)
A trade agreement between the US & China could result in a “sell the news” market reaction, if the deal comes up short or does not remove existing tariffs, traders said. Pres Trump indefinitely dropped his threat to raise tariffs to 25% from 10% on $200B in Chinese goods, ahead of the Mar 1 deadline for trade progress. The pres said talks were productive & he looks forward to signing an agreement with China's Pres Xi Jinping. Stocks surged after the weekend announcement, with the Dow higher & Chinese shares up more than 5% overnight. But some strategists say Trump could eventually move forward on a deal that does not satisfy all US concerns including Chinese subsidies to its businesses & how it treats intellectual property. Strategists note a partial deal could include some changes around intellectual property but no change in the 2018 tariffs put on Chinese goods, & those would be kept in place as an enforcement measure. China would increase its purchase of US goods. A real deal would include bigger changes on intellectual property regulations & enforcement.
Investors counting on a big rally when China and US trade talks conclude could be disappointed
Oil prices tumbled more than 3% after Pres Trump publicly urged OPEC to lower the cost of crude, putting pressure on the Saudi-led group to soften its price-boosting output cuts. “Oil prices getting too high. OPEC, please relax and take it easy. World cannot take a price hike - fragile!” the pres said in an AM tweet. The message comes 2 months into a fresh round of production cuts from OPEC & other nations. The producers meet in mid-Apr to review the deal, which is scheduled to last thr H1. West Texas Intermediate (WTI) crude futures ended today's session down $1.78 (3.1%) at $55.48 a barrel. On Friday, WTI hit a more than 3-month intraday high at $57.81 a barrel. Intl benchmark Brent crude futures fell $2.36 (3.5%) at $64.76 a barrel & Brent hit $67.73 a barrel on Fri, its highest intraday level since mid-Nov. Trump has not tweeted about OPEC since early Dec, right before the producer group & 10 allied nations led by Russia defied his calls to keep pumping at high volumes. The group instead agreed to cut 1.2M barrels per day from the market. The OPEC+ alliance reached the deal after oil prices sank more than 40% in Q4-2018. The group first began curbing output in 2017 to end a punishing downturn, but lifted the caps last Jun as oil prices hit 3½-year highs ahead of Trump's sanctions on Iran, OPEC's 3rd biggest producer at the time. Under pressure from Trump, the producers, & Saudi Arabia in particular, hiked output thru Nov. That month, DC surprised them by allowing some of Iran's biggest customers to continue importing its oil as US sanctions snapped back into place. The move contributed to the pullback in prices. Saudi Arabia has now sharply reversed course. After its output surged to a record 11.1M barrels per day in Nov, it has throttled back production to 10.2M bpd. Saudi Energy Minister Khalid al-Falih says the Saudis will cut even further, pumping at 9.8M bpd next month.
Oil sinks more than 3 percent after Trump tells OPEC prices are too high
Gold prices settled lower, pressured as a broad rally in global stocks on the back of progress in US-China trade negotiations drew investor interest away from the precious metal. Futures for Apr delivery lost $3.30 (0.3%) to settle at $1329 an ounce, after gold on Fri booked a 0.8% weekly rise. Pres Trump late-Sun signaled that he would be inclined to extend a Mar deadline for increasing tariffs, citing “substantial progress” in talks between Beijing & DC, intended to resolve longstanding trade differences between the world's largest economies. The trade developments, however, triggered some appetite for risk across the globe, with the Shanghai Composite Index closing up 5.6% today, representing that index's best daily gain in 3 years. Meanwhile, the Dow & the S&P 500 index also traded higher. Gold, viewed as a haven asset, tends to decline when stock rise. The precious metal's decline today may also have been somewhat offset by the fact that China is one of the world's largest buyers of commodities, including gold, & progress on tariff talks can be viewed as supportive for the natural resources complex.
Stocks were purchased in the AM on the news about extending the trade deal deadline. But optimism faded & the averages closed well off their highs. The averages are vastly overbought & nervous investors are buying stocks cautiously or staying on the sidelines. Meanwhile, economic data is coming in soft. Not terrible, but soft is not welcome when the stock market is so close to record highs. On the other hand, the bulls were happy to see the Dow close above the important 26K level.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
A trade agreement between the US & China could result in a “sell the news” market reaction, if the deal comes up short or does not remove existing tariffs, traders said. Pres Trump indefinitely dropped his threat to raise tariffs to 25% from 10% on $200B in Chinese goods, ahead of the Mar 1 deadline for trade progress. The pres said talks were productive & he looks forward to signing an agreement with China's Pres Xi Jinping. Stocks surged after the weekend announcement, with the Dow higher & Chinese shares up more than 5% overnight. But some strategists say Trump could eventually move forward on a deal that does not satisfy all US concerns including Chinese subsidies to its businesses & how it treats intellectual property. Strategists note a partial deal could include some changes around intellectual property but no change in the 2018 tariffs put on Chinese goods, & those would be kept in place as an enforcement measure. China would increase its purchase of US goods. A real deal would include bigger changes on intellectual property regulations & enforcement.
Investors counting on a big rally when China and US trade talks conclude could be disappointed
Oil prices tumbled more than 3% after Pres Trump publicly urged OPEC to lower the cost of crude, putting pressure on the Saudi-led group to soften its price-boosting output cuts. “Oil prices getting too high. OPEC, please relax and take it easy. World cannot take a price hike - fragile!” the pres said in an AM tweet. The message comes 2 months into a fresh round of production cuts from OPEC & other nations. The producers meet in mid-Apr to review the deal, which is scheduled to last thr H1. West Texas Intermediate (WTI) crude futures ended today's session down $1.78 (3.1%) at $55.48 a barrel. On Friday, WTI hit a more than 3-month intraday high at $57.81 a barrel. Intl benchmark Brent crude futures fell $2.36 (3.5%) at $64.76 a barrel & Brent hit $67.73 a barrel on Fri, its highest intraday level since mid-Nov. Trump has not tweeted about OPEC since early Dec, right before the producer group & 10 allied nations led by Russia defied his calls to keep pumping at high volumes. The group instead agreed to cut 1.2M barrels per day from the market. The OPEC+ alliance reached the deal after oil prices sank more than 40% in Q4-2018. The group first began curbing output in 2017 to end a punishing downturn, but lifted the caps last Jun as oil prices hit 3½-year highs ahead of Trump's sanctions on Iran, OPEC's 3rd biggest producer at the time. Under pressure from Trump, the producers, & Saudi Arabia in particular, hiked output thru Nov. That month, DC surprised them by allowing some of Iran's biggest customers to continue importing its oil as US sanctions snapped back into place. The move contributed to the pullback in prices. Saudi Arabia has now sharply reversed course. After its output surged to a record 11.1M barrels per day in Nov, it has throttled back production to 10.2M bpd. Saudi Energy Minister Khalid al-Falih says the Saudis will cut even further, pumping at 9.8M bpd next month.
Oil sinks more than 3 percent after Trump tells OPEC prices are too high
Gold prices settled lower, pressured as a broad rally in global stocks on the back of progress in US-China trade negotiations drew investor interest away from the precious metal. Futures for Apr delivery lost $3.30 (0.3%) to settle at $1329 an ounce, after gold on Fri booked a 0.8% weekly rise. Pres Trump late-Sun signaled that he would be inclined to extend a Mar deadline for increasing tariffs, citing “substantial progress” in talks between Beijing & DC, intended to resolve longstanding trade differences between the world's largest economies. The trade developments, however, triggered some appetite for risk across the globe, with the Shanghai Composite Index closing up 5.6% today, representing that index's best daily gain in 3 years. Meanwhile, the Dow & the S&P 500 index also traded higher. Gold, viewed as a haven asset, tends to decline when stock rise. The precious metal's decline today may also have been somewhat offset by the fact that China is one of the world's largest buyers of commodities, including gold, & progress on tariff talks can be viewed as supportive for the natural resources complex.
Stocks were purchased in the AM on the news about extending the trade deal deadline. But optimism faded & the averages closed well off their highs. The averages are vastly overbought & nervous investors are buying stocks cautiously or staying on the sidelines. Meanwhile, economic data is coming in soft. Not terrible, but soft is not welcome when the stock market is so close to record highs. On the other hand, the bulls were happy to see the Dow close above the important 26K level.
Dow Jones Industrials
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